The cost of trade credit involving cash discounts as a form of short-term financing is:

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Trade credit involving cash discounts may seem like a low-cost form of short-term financing, but when compared to commercial bank credit, it usually has a higher cost. This is because the cash discount offered by the supplier is essentially an interest charge on the outstanding balance, and this rate can be quite high. Additionally, the cost of trade credit may include additional expenses such as higher purchase prices or penalties for late payment.

The Cost of Trade Credit Involving Cash Discounts as a Form